‘Gazunder’ is such an unusual word that the first time I heard it I figured it must be a joke.
But for many on both sides of the property market, gazundering is very serious indeed. For sellers, it’s potentially extremely costly. For buyers, it could represent significant savings.
Gazundering is when a buyer suddenly reduces their offer on a property after previously agreeing with the seller to a higher one. Oftentimes, it forces sellers to agree to a lower-than-expected price or else look elsewhere for a new buyer.
Buyers have been known to seek reductions of up to 20% -- and making the demand on the very day that contracts are to be exchanged.
It’s important to differentiate gazundering from its property market cousin, ‘gazumping’.
Gazumping is when a seller breaks a verbal agreement on a sale because they’ve accepted a higher offer from someone else. For more on gazumping, read our blog on what to do if it happens to you.
The difference is gazundering flips the power dynamic. It often occurs in buyers’ markets, when buyers feel confident that they can extract concessions from the seller for a lower price.
A 2018 government report found that respondents felt that both gazumping and gazundering were equally significant issues in Britain’s real estate market.
Yes - Like gazumping, gazundering is perfectly legal and buyers have a right to engage in it as long as no contracts have yet been signed.
Gazundering is more common in England, Northern Ireland, and Wales than in Scotland, where transactions become legally binding earlier in the process.
Those are more complicated questions to which there’s no easy answer.
To be sure, it probably depends on which side of the gazunder you stand: it may feel frustrating as a seller if it happens to you, but if you’re a buyer it likely feels reassuring that you’ve got an extra bargaining tool with which to work.
Gazundering is on the minds of many people in the property market. According to a 2019 report, 45% of people surveyed expressed concern about gazundering, with that figure rising to 50% in the South of England, London, and West Midlands.
Buyers who engage in gazundering usually do so because they realise they’re suddenly in a much stronger position than at the start of their property search.
For instance, the seller may have already taken the home off the market because a verbal agreement has been reached with the buyer. Plus, sellers are often part of a property chain themselves, so they may have relatively little flexibility.
In other cases, the buyer may learn new information about the property that lowers its value or, if the market is volatile, they could learn that housing prices have plummeted in the time since they made the original offer.
In some situations, the buyer may feel forced into lowering their original offer because, for instance, they’re part of a property chain as well and the offer on their sales property has been reduced.
Sellers can take certain steps to reduce -- though not eliminate entirely -- the chances that they will be gazundered.
Find an agent who is adept at navigating the selling process. Specifically, an experienced agent should have a knack for weeding out the serious homebuyers from the punters. Click here to find the best local agent in your area.
If you’re lucky enough to have several offers, you could also decide to accept an offer from a buyer who isn’t part of a chain. Click here to read our blog, ‘What’s the best way to manage a property chain?’
Set a realistic asking price Buyers may initially make an offer on a property in order to secure it, only to reserve their right to lower that offer later. But if you’ve priced your property fairly, they may feel less inclined to try to extract last-minute reductions.
Move quickly The less time there is from the moment you’ve made a verbal agreement to when contracts are exchanged, the less likely the buyer will change their mind.
Be honest Don’t try to hide some flaw about your property that will only be revealed anyway because that could give the buyer the excuse they’re looking for to gazunder.
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On the other hand, buyers can take steps to maximise the chances for a successful gazunder.
For instance, they can ensure that:
The seller is part of a property chain If the buyer is also in the middle of purchasing a home, they may need whatever you’re offering them, regardless of whether it’s less than they had planned.
They make an appropriate offer Calibrate your new offer (your ‘gazunder’) so that the buyer won’t just walk away rather than settle for a figure that is just too low. Make an offer that the buyer will still feel comfortable accepting. Read our guide to making an offer on a house.
If you’re contemplating gazundering but feel that, well, it may be just a little unethical, then it’s worth knowing that there certain circumstances in which gazundering can be legitimate.
Some instances in which gazundering is seen as less objectionable include:
Ultimately, gazundering can either offer an opportunity to take advantage of when buying a home or a challenge to overcome when selling a property.
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